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The first legal case comes after the regulator issued over $140,000 infringement notices for greenwashing last year.
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ASIC launches greenwashing court action against Mercer
28 February 2023
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The Australian Securities and Investments Commission (ASIC) has launched proceedings in the Federal Court against Mercer Superannuation (Australia) Limited for allegedly making misleading statements about the sustainable nature of some investment options.
The regulator alleged that Mercer’s website made claims for seven “Sustainable Plus” investment options offered by Mercer Super Trust (of which Mercer is the trustee) and marketed them as suitable for members who “are deeply committed to sustainability”.
It claimed the options excluded investments in companies involved in carbon-intensive fossil fuels, alcohol production and gambling.
However, ASIC alleged that members who took up the Sustainable Plus options had investments in 15 companies involved in the extraction or sale of carbon-intensive fossil fuels, 15 companies involved in the production of alcohol and 19 companies involved in gambling.
ASIC said the companies included AGL Energy, BHP Group, Heineken Holding, Treasury Wine Estates, Crown Resorts and Tabcorp Holdings.
“Mercer made false and misleading statements and engaged in conduct that could mislead the public,” ASIC said.
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The regulator is seeking declarations and pecuniary penalties from the Federal Court as well as injunctions preventing Mercer from continuing to make any of the alleged misleading statements on its website, and orders requiring Mercer to publicise any contraventions found by the court.
The action is the regulator’s first over greenwashing and also its first since legislative amendments, inspired by the Financial Services Royal Commission, bolstered its capacity to act on a broader range of superannuation trustee conduct.
ASIC deputy chair Sarah Court said the case reflected “continuing efforts to ensure sustainability-related claims made by financial institutions are accurate”.
“There is increased demand for sustainability-related financial products, and with that comes the growing risk of misleading marketing and greenwashing,” said Ms Court.
“If financial products make sustainable investment claims to investors and potential investors, they need to reflect the true position.
“If investments in certain industries like fossil fuels are said to be excluded, this promise must be upheld.”
ASIC has previously issued over $140,000 in infringement notices in response to concerns about alleged greenwashing, including against Tlou Energy Limited, Vanguard Investments Australia, Diversa Trustees Limited and Black Mountain Energy.
The court has yet to schedule a date for the first case management hearing.
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